US Congressional Research Service (CRS): Bitcoin’s Use Is Speculative Investment Asset, Not Money
US Congress Reveals Bitcoin Adoption Is Minuscule Compared To Traditional Assets
According to a new report released by the Congressional Research Services (CRS) although demand for cash in the US continues to grow, it is becoming less common for making payments. However, most of the people decided to move towards traditional non-cash systems but not to Bitcoin (BTC) as many analysts suggested.
Traditional Financial Payments Rather Than Bitcoin
As the cryptocurrency market expands, many individuals and analysts suggest the most popular digital asset is used more and more to make payments and process transactions. However, things are not as most of Bitcoin maximalist expect. Indeed, the CRS showed that crypto payments are less than 6 percent of the total transactions.
Cash is used by 31% of the consumers, followed by debit card with 27%, credit card (18%), electronic payments 11%, checks 7% and “Other” 6%.
The report explains that the migration away from cash has been in favor of traditional non-cash payment systems. However, there are some observers that predict alternative systems to play a larger role in the future.
About private systems dealing with distributed ledger technology, the reports says:
“Private systems using distributed ledger technology, such as cryptocurrencies, may not serve the main functions of money well and face challenges to widespread acceptance and technological scalability.”
Moreover, the study explains that Bitcoin’s price data does not reflect the demand for the digital asset. The CRS looked at how many times Bitcoins are transferred each day. And indeed, according to the report, they are “minuscule” compared to traditional systems and payments.
The CRS shows that Bitcoin had an average 310,000 transactions per day on March 12. That means that Bitcoin would be performing 113 million transactions per year. Meanwhile, there are more than 144 billion non-cash payments in 2015, which is 1,275 times the averaged number of yearly Bitcoin transactions.
Moreover, a large part of the transactions related to Bitcoin could be related to investors that are moving funds between wallets or that want to purchase and hold the Bitcoin as an investment rather than to use it and purchase something. Thus, Bitcoin is not being used as money in some of these transactions as per the CRS.
In addition to it, the report explains that it is difficult to think about a future without cash and where it becomes replaced. Nonetheless, cash’s hegemony as a dominant payment system seems to have come to an end.